UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-KSB

            ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                       For the year ended October 31, 2000
                         Commission File Number 0-30783


                             ACT INTERNATIONAL, INC.
                 (Name of small business issuer in its charter)


                  Nevada                                87-06263223
     (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                  Identification No.)


                4035 South 300 West, #6, Salt Lake City, UT 84107
                    (Address of principal executive office)

                                 (801) 281-3073
                           (Issuer's Telephone Number)

Securities Registered Pursuant of Section 12(b) of the Act: None

Securities Registered Pursuant of Section 12(g) of the Act: Common Stock, $0.001
                                                            Par Value

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act of 1934  during the  preceding  12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.
Yes [X] No [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will be contained, to the best of
registrant's   knowledge,   in  definitive   proxy  or  information   statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment of
this Form 10- KSB. [ ]

The issuer had no operating revenues for the year ended October 31, 2000.

This report contains a total of   pages.

As of October 31, 2000,  there were  16,899,960  shares of the  issuer's  common
stock outstanding.  The securities of ACT International,  Inc. are not traded on
any exchange or market quotation system.


<PAGE>

                                     PART I

ITEM 1.  Business

Overview

ACT International, Inc. ("the Company") was originally incorporated in the state
of Nevada on January 20,  1999 as  American  Coating  Technologies,  Inc.  Since
inception,  the Company has had no operating  revenues,  and has  accumulated  a
deficit of $2,436,043 through October 31, 2000.

As more fully described below, the Company completed the following transactions.
On February  1, 1999 the Company  acquired  all  rights,  title and  interest in
certain diamond  coating  technology  represented by U.S.  Patent No.  5,254,237
dated October 19, 1993, as more fully described below.

Acquisition of Patent Rights

On  February  1, 1999,  American  Coating  Technologies,  Inc.  entered  into an
agreement  with S.R.& T.  Partnership,  Alvin A. Snaper,  Taylor Family  Limited
Partnership,  and Rothwell Trust. Pursuant to the agreement, SRT, Snaper, Taylor
and Rothwell transferred all right title and interest in certain diamond coating
technology  represented by U.S.  Patent  No.5,254,237,  developed by Mr. Snaper,
including all supplemental  improvements thereto and to the Plasma Arc Apparatus
for producing  diamond  semiconductor  devices or machine tool coatings,  in all
applications,  including  without  limitation,  the following:  Low  Temperature
Titanium  Nitride,  Cobalt Nitride,  Chromium Nitride,  Ferroelectric  Coatings,
Picsoelectric Coatings, Diamond Hard Coatings, Diamond Semiconductor Substrates.

Pursuant to the  agreement  Snaper  received  2,750,000  common  shares,  Taylor
received  1,125,000 common shares and Rothwell received 1,125,000 common shares.
Additionally,  ACT shall pay Snaper,  Taylor and  Rothwell,  each,  on an annual
basis, a royalty equal to 1.667 percent of the total gross  revenues  derived in
any  way by ACT  and  its  subsidiaries,  sister  corporations,  affiliates  and
assigns,  from the technology (whether from royalties,  rentals,  sales, service
contracts,  consulting contracts and any other source) during the prior calendar
year.  The royalty  payments  are due and payable on Feburary  15th for 51 years
after the date of the agreement.

ACT also agreed that  Snaper's  interest in ACT will not be diluted to less than
51% of the  outstanding  stock  unless and until ACT has  completed  one or more
public  underwritings,  or otherwise obtains financing,  raising not less than a
cumulative $2,000,000 at approximately $13 to $15 per share.

Additionally,  the Company also  effected a forward  stock split and changed its
corporate name.

Change of the Name of the Company

The Board of  Directors  of the  Company  adopted a  resolution  authorizing  an
amendment to the  Company's  Articles of  Incorporation  to change the name from
"American Coating Technologies,  Inc." to "ACT International,  Inc." Approval of
the Amendment by the  stockholders was obtained by written consents in lieu of a
meeting, dated May 15, 2000, of the holders of a majority of the voting power of
the outstanding shares of the Company's Common Stock.

The Company adopted the name ACT International, Inc. to conform with its plan to
license  its  technology  worldwide  and  exploit  markets  that go  beyond  the
geographic boundaries of the United States and North America.


<PAGE>

                             DESCRIPTION OF BUSINESS

Industry Overview. Chemical Vapor Deposition (CVD) is a process designed to bond
a thin coating of titanium nitride to the surface of a metal tool or instrument.
The tool to be coated must be heated to extremely high  temperatures in a vacuum
chamber filled with reacting  chemical vapors.  The titanium nitride produced by
this method increases the useful life of a cutting tool significantly.

Alvin A.  Snaper  developed  Physical  Vapor  Deposition  (PVD),  a process  for
low-temperature,  smooth,  thin-film coatings.  This process is carried out in a
vacuum, and involves the use of several arc evaporators  positioned on the sides
and top of the vacuum  chamber  that serve as plasma  generators.  The  coatings
material  is  formed  into a  cathode  that is  positioned  in  front of the arc
evaporator.  Then the electrical arc that is generated causes minute evaporation
of the cathode into a high energy, concentrated plasma which is deposited on the
tool in the vacuum chamber.

Much of the CVD industry is  concentrated  in  microelectronics,  in  particular
semiconductors. PVD is less concentrated and covers a variety of industries such
as information storage, packaging and industrial coatings.

The highest  volume usage of PVD in  microelectronics  is in the  fabrication of
semiconductors.  PVD is used  routinely  to  deposit a variety  of films such as
aluminum, titanium and titanium nitride, and conductor metals.

The advantages of PVD in semiconductor  fabrication are that it provides uniform
deposition  of thin  films and  excellent  coverage.  PVD can be used to deposit
metals on interconnect levels. New techniques such as collimated  sputtering and
ionized magnetron  technology have been added to improve  efficiency for smaller
geometry devices.

Product. The patented Plasma Arc Diamond Coating process developed by Mr. Snaper
allows a surface to be coated at room temperature  with super-hard  Diamond (DC)
and Diamond-Like  Coatings (DLC).  This process greatly expands (a) the types of
materials  that can be coated and (b) the variety of  applications  now feasible
for coating technology.

Testing by Mr.  Snaper of these new  compounds  indicates  that  while  titanium
nitride  coating can  increase  the useful  life of a tool by 600% or more,  the
diamond-like  coating  can  further  increase  the useful life of a tool by over
1000% as compared to titanium nitride coated tools.

Diamond  and   diamond-like   films  have  a  unique   combination  of  physical
characteristics  that are not found in other  materials.  Diamond is the hardest
available  material known and can be transparent.  At room temperature it is the
best known  thermal  conductor,  and it will conduct heat five times better than
copper.

Diamond  is also an  electrical  insulator  and  becomes  a  semiconductor  when
controlled quantities of impurities are introduced.  Resistant to most chemicals
and radiation, diamond can become almost frictionless when it is polished.

Due to  these  properties,  diamonds  have  potential  uses in  many  commercial
applications  including electronic packaging materials to improve the output and
reliability of components, wet coatings to extend the lives of cutting tools and
transparent optical coatings to protect sensitive lenses.


<PAGE>

Markets

CVD Market.  Eighteen companies account for 75% of the worldwide equipment sales
and services work in the Chemical  Vapor  Deposition  (CVD)  coatings  industry.
[Business Opportunity Report GB-185A,  Thin Layer Deposition:  Highlighting CVD,
by Robert Moran, Project Analyst,  Business  Communications Company, Inc. (BBC),
July 1998,  pp. 31-32,  64, 72.] The main markets for CVD  technology are in the
fields of  microelectronics,  cutting tools,  automotive and aerospace parts and
medical  instruments.  Total CVD equipment  sales worldwide is projected to grow
from $4.4  billion  in 1995 to over $8.1  billion  by the year  2000.  Total CVD
services  worldwide  is  expected  to expand  from $449  million in 1995 to $697
million in 2000. [Thin Layer  Deposition:  Highlighting  CVD, supra, pp. 85, 86,
93-96, 100-101, 106- 107, 114-115, 117, 130-132, 138, 150-151, 157.]

PVD Market.  Leading  companies in the Physical  Vapor  Deposition  (PVD) market
include most of the same  companies  that are prominent in CVD  technology.  One
reason  for this is that in many  cases,  parts  lending  themselves  to coating
services  can be coated by either CVD or PVD.  Worldwide  there are  twenty-five
companies combined for the CVD and PVD equipment sales and services markets, and
these companies account for 75% of the total sales. [Business Opportunity Report
GB-186B,  Thin Layer  Deposition:  Highlighting  PVD, by Robert  Moran,  Project
Analyst,  Business  Communications  Company,  Inc.  (BBC),  September  1996, pp.
65-67].  The main markets for PVD  technology are in  microelectronics,  cutting
tools,  automotive  and  aerospace  parts,  flexible  and  specialty  packaging,
information storage, optics and medical instruments. However, the biggest market
for PVD is expected to be in  semiconductors.  PVD equipment sales worldwide are
projected  to grow from $4.1  billion  to 1995 to over $7.3  billion by the year
2000.  Total PVD  services  worldwide is expected to expand from $567 million in
1995 to $850 million in 2000. [Thin Layer  Deposition:  Highlighting PVD, supra,
pp. 69,70-72,  77-79, 80-81, 83, 87-88, 91-95, 105-106,  109-117,  128-129, 134-
137-142,  148-149,  152-156,  159-163,  169-170, 174-178, 180, 186-187, 191-193,
198-199, 202-204, 209].

Market Segments.

Low-Temperature  Plasma Arc Diamond Coating  Technology in Traditional  Markets.
The  single  most  important  advantage  of ACT's  Plasma  Arc  Diamond  Coating
technology is that it is possible to deposit uniform  coatings at  significantly
lower temperatures,  even room temperature.  Heretofore, the problem of most CVD
and PVD coatings is that they must be applied at  temperatures  ranging from 350
degrees to 1,300 degrees, which distorts the temper or changes the metallurgy of
the  coated  substrata  such  as  plastics,   aluminum,  copper,   semiconductor
substrates,  etc. Thus, with high  temperature CVD and PVD processes,  substrata
must often be re-tempered in order to bring the tolerances back into compliance.
Consequently,  there have been many  tools and  instruments  that would  greatly
benefit from Plasma Arc Diamond coating, but these tools and instruments are not
coated because of the high temperature  problems  inherent in current CVD or PVC
processes.  The  coating  market  can be  greatly  expanded  with the Plasma Arc
Diamond Coating technology from ACT International, Inc..

Based on ACT's  research,  tools coated by Plasma Arc Diamond  Coating  ("PADC")
process are absolutely  precise.  Lower temperatures used by the PADC process do
not change the underlying substrate. Metals such as copper, aluminum,  plastics,
etc can be  coated  using  the PADC  process.  Optics  can also be  coated  more
efficiently with the PADC process.

Thin-Film Diamond Coatings Technology. The management is of the opinion that its
new thin-film diamond coatings  technology will make possible the use of diamond
coatings  for  many  applications  in  place of the  traditional  coatings  like
titanium nitride.

There are many  advantages for  diamond-coated  tools. A single tool can contain
and maintain several cutting edges, tools with advanced chip breaker designs can
be coated, the diamond edge does not have to be polished. Through control of the
surface  morphology,  tools can be used as grown.  Tools will have longer useful
life and the CVD process is expected to be lower in cost.  These  factors,  plus
the  characteristics  of diamond make diamond coatings the coating of choice for
tungsten carbide, silicon nitride, and silicon carbide tools.

<PAGE>

Thin-Film  Technology  for  Semiconductors.  To be a  useful  semiconductor  for
transistors  and other  electronic  applications,  diamond must be "doped," i.e.
implanted  with trace amounts of  impurities.  The needed  impurities are of two
types:  p-type,  which endows diamond with the equivalent of a positive electric
charge, and n-type,  for the equivalent of a negative charge.  Thin-film diamond
processes  to date have been able to  successfully  dope with the p-type but not
with the n-type. Management believes that its proprietary and patented Radio Arc
Plasma  technology,  U.S.  Patent  #5,254,237,  creates a way to accomplish this
doping.

Marketing Strategy.

Mr. Alvin A. Snaper,  Chairman of ACT is an internationally  recognized inventor
with over 600 patents and is considered a pioneer in the coatings industry. Over
twenty years ago, Mr. Snaper invented and developed many of the original coating
processes in use today.  Through  acquisition and partnering  arrangements,  ACT
intends to establish an Operations Center in Las Vegas, NV where vacuum chambers
will be fitted with the necessary  components to achieve low temperature  Plasma
Arc Deposition coating process including diamond coating,  diamond like coating,
and the diamond semiconductor.

Management  is  continuing  to  refine  its  business  plan   incorporating  the
acquisition and  construction of Company-owned  facilities,  while continuing to
license its Plasma Arc Diamond  Coating  Process to domestic  and  international
companies. Vacuum chambers for semiconductor manufactures and industrial coating
service centers will be retrofitted at the Operations  Center and then placed in
licensed  service based on the size of the  chambers.  In cases of large orders,
OEM manufactures will be trained in the retrofit process.  Representatives  from
coating companies will be able to invite their customers to visit the Operations
Center  where  they  will  be  able  to  observe  demonstrations  of  ACT's  low
temperature and thin film diamond technology.

Dependence on One or a Few Major Customers.

ACT does not expect  that any single  customer  will  account  for more than ten
percent of its business.

Patents, trademarks,  licenses, franchises,  concessions,  royalty agreements or
labor contracts.

Patent No. 5,254,237 which is entitled, "Plasma Arc Apparatus for Producing Thin
Film Diamond  Coatings," was granted on October 19, 1993 to Alvin A. Snaper, the
inventor  of the  original  titanium  nitride  and  thin  film  diamond  coating
processes.  The Diamond Coating Process includes, but is not necessarily limited
to,  low  temperature  titanium  nitride,  cobalt  nitride,   chromium  nitride,
ferroelectric  coatings,  piezoelectric  coatings,  diamond  hard  coatings  and
diamond semi-conductor substrates.

         From the patent  document,  column 8, line 45, the following  paragraph
         summarizes the process as:

         Thus there has been disclosed a unique plasma arc deposition system for
         producing  diamond,   doped  diamond  or  diamond-like  coatings  on  a
         substrate by pulsed plasma  technique.  These techniques do not require
         or  produce  temperature  rise  at  the  substrate,  allowing  normally
         temperature sensitive substrates to be utilized.  Typical of substrates
         which  bond  readily  to  the  thin  film  diamond   coatings   without
         degradation are zinc sulfide (ZnS) or zinc selenide  (ZnSe),  which are
         useful in infrared  windows or laser  components.  The system disclosed
         and described can be used in the  development of products and materials
         such as producing pn junction  diodes of  crystalline  carbon,  so that
         rectifiers able to withstand temperatures in the neighborhood of


<PAGE>

         1000 to 1500 degrees Fahrenheit are also possible. Insulated gate field
         effect  transistors that can handle high source to drain potentials and
         provide high gain without  seriously  loading the signal source,  while
         operating at elevated temperatures beyond those achievable with silicon
         devices,  can  be  produced  with  the  system  described.  Many  other
         diamond-like integrated circuit chips, such as light emitting diodes or
         diodes used in solid state  lasers are  possible.  Since thick  diamond
         layers of good optical clarity can be produced by the process described
         herein,  among the new devices that have become  possible is an optical
         modulator that depends upon the polarizing  effects of electric  fields
         upon light beams through the crystal  lattice.  This property  leads to
         the  entirely  new  family  of  high-power,  opto-electronic  coupling,
         modulating,   scanning   and/or  sensing  devices  based  upon  diamond
         semiconductors.  Many other semiconductor  devices that can utilize the
         enhanced  properties  of  diamond-like  films can be produced  with the
         invention disclosed and described herein.

Royalty  Agreements.  Pursuant to the Assignment  Agreement entered into between
the Company and S.R. & T. Partnership  wherein ACT received the  above-described
patent rights by assignment,  ACT incurred a royalty obligation whereby ACT must
pay to S.R.  & T.  Partnership  a royalty  each year on  February  15th equal to
5.001% (or 1.677% to each of the three partners of S.R. & T. Partnership) of the
total annual gross revenues (without any deductions  whatsoever)  derived in any
way by ACT and/or its subsidiaries, sister corporations,  affiliates and assigns
from  the  technology  represented  by  U.S.  Patent  #5,254,237  (whether  from
royalties,  rentals,  sales, service contracts,  consulting contracts and/or any
other source) during the prior calendar year.

Proprietary Rights

ACT relies on confidentiality and non-competition  agreements with its employees
and  sub-contractors  in order to protect its  proprietary  know-how and employs
various methods to protect the processes,  concepts,  ideas and documentation of
it  proprietary  technology.  Such  methods,  however,  may not afford  complete
protection,  and there can be no  assurance  that others will not  independently
develop  similar  know-how  or obtain  access to ACT's  know-how  or  processes,
concepts,  ideas and  documentation.  ACT does not sell or transfer title to its
products to  customers.  The  products are  licensed on a  "right-to-use"  basis
pursuant  to a  license,  which  is  nontransferable  and  restricts  use of the
products to the customer's internal purposes on specified applications or uses.

Government Approvals for Principal Products and Services.

The Company plans to focus its efforts in developing industrial applications for
its diamond coating process,  which will not require government approval for its
products or services.  Accordingly,  existing governmental  regulations will not
have an adverse effect on the Company's operations.  Management believes that it
is unlikely  that any  governmental  regulations  will arise in the  foreseeable
future that would affect the Company's  operation.  However,  should the Company
develop any diamond-coated  product that could be employed in the medical, food,
pharmaceutical, or biological applications markets, those products would require
approval by the FDA. Such procedures would be expensive and involve a protracted
administrative  process to gain  approval.  Currently,  ACT has no  intention to
develop and market products for the food, medical or pharmaceutical industries.

Employees.

ACT  currently  employs  three full time persons and no part time  persons.  ACT
shall employ individuals as required.

ACT is not subject to any  collective  bargaining  agreement.  It is anticipated
that ACT's employees will be covered by an employee stock option plan;  however,
at this stage, the terms of such a plan have not been determined.

<PAGE>

Seasonal Nature of Business Activities.

ACT's business activities are not seasonal.

Sources and Availability of Materials

The materials and vendors necessary for ACT to continue operations are available
from many sources.  The Company foresees no shortage of supplies or difficulties
in  acquiring  materials  and  vendors  necessary  to conduct  its  business  as
presently conducted.

ACT relies heavily on its own expertise. Dr. Frederick J. Haydock,  President of
ACT and Alvin  Snapper,  the  Chairman of the Board of Directors of ACT, and the
inventor of the Company's  proprietary  technology,  provide  certain  technical
equipment and services including:

1.       engineering support for proprietary coating technology;
2.       Laboratory and equipment design and implementation; and
3.       Research  and   development  for  improvement  of  the  technology  and
         development of coatings for specific applications

Competition

The  coating  processes  industry is highly  competitive.  There are many larger
vendors that have substantially  greater financial and technical  resources than
ACT; in the future,  these companies may develop and market products  similar to
those offered by ACT.  Competitive products are currently offered by a number of
independent coatings companies.  The most important  consideration for customers
of coating processes include product capability,  integration,  on-going product
enhancement,  ease of application and use,  reliability and quality of technical
support,  documentation and training,  name  recognition,  vendor experience and
stability, and, to a lesser extent, price. The Company believes that it competes
favorably  in these  areas,  especially  in light  of its  patented  technology.
However, the dynamic nature of the coatings industry could quickly place ACT and
its products at a competitive disadvantage.

Research and Development

The coating  processes  industry is  characterized  by continuous  technological
change,  which  requires  an on-  going  high  level  of  expenditures  for  the
development  and  maintenance  of  coating   processes.   It  is  customary  for
modifications  to be made to a coating process or application as experience with
its use grows or as changes  in  manufacturing  equipment  and  techniques.  The
Company expended $147,980 for R&D costs during the fiscal year ended October 31,
2000.

Principal Office

The Company is a Nevada  corporation with its executive  offices located at 4035
South 300 West,  #6, Salt Lake City,  UT 84107.  Its  telephone  number is (801)
281-3073.

<PAGE>

Reports to Security Holders

ACT International,  Inc. is a reporting company pursuant to Section 12(g) of the
Securities Exchange Act of 1934.  Accordingly,  it files all reports as required
by the U.S.  Securities and Exchange  Commission  and the rules and  regulations
promulgated   thereunder,   which  includes   Annual  Reports  under  Form  10-K
accompanied with audited financial statements.

        The  public may read and copy any  materials  filed by ACT with the U.S.
Securities and Exchange Commission ("SEC") at the SEC's Public Reference Room at
450  Fifth  Street,  N.W.,  Washington,   D.C.  20549.  The  public  may  obtain
information on the operation of the Public  Reference Room by calling the SEC at
1-800-732-0330.  ACT is an electronic  filer. The SEC maintains an Internet site
that contains reports, proxy and information  statements,  and other information
regarding issuers that file  electronically  with the SEC at  http://www.sec.gov
under EDGAR Database.

ITEM 2.  Properties

Office Facilities

At October 31, 2000, the Company leased the following facility:

                             Lease            Approximate
     Location             Primary Use         Sq. Footage        Expiration
    ---------             -----------         -----------        ----------
Salt Lake City, UT      Corporate Office      750 sq. ft.       February 2001

ITEM 3.  Legal Proceedings

The Company is party to the following Legal Proceedings:

Brockbank v. American Coating Technologies, Inc.

         (1) Name of Court: Third District Court for Salt Lake County,  State of
Utah

         (2) Date Proceedings Began: December 10, 1999

         (3) Principal Parties: Stephen W. Brockbank and ACT International, Inc.

         (4) Description of Facts:  Plaintiff is the former president of ACT and
sued the  Company  seeking  certain  stock  payments.  The  Company  denied  any
liability and asserted counterclaims for breach of fiduciary duty, conversion of
corporate property, embezzlement, fraud and breach of contract.

         (5) Relief Sought: Plaintiff seeks issuance of 300,000 shares of common
stock;  Defendant/Counter-claimant  seeks  damages  to be proven  at trial,  but
believed to be in excess of $150,000.

<PAGE>

Informal Investigation By Utah Division of Securities

         Subsequent to the end of the fiscal year on October 31, 2000, and prior
to the filing of this annual report,  management  received  information  from an
investor  claiming  to be a  shareholder  of ACT,  even  though his name did not
appear  on  the  shareholder  list  maintained  by the  Corporation.  Management
reviewed the documentation provided by such investor and determined that certain
misrepresentations may have been made by an individual claiming to be an officer
of the  Company,  who was in fact,  not an  officer of ACT,  who was  soliciting
investment  capital to  purchase  "free  trading"  shares.  The  transaction  in
question took place in October, 2000. Management determined that the shares were
being sold by said individual in behalf of the Rothwell Trust,  whose shares are
restricted   pursuant  to  the  provisions  of  Rule  144.  Upon  receiving  the
information  from said  investor,  management  contacted  the Utah  Division  of
Securities and reported what it deemed to be a possible securities  violation by
a person  posing as an officer  of the  Company.  Management  is  continuing  to
cooperate  with the Utah Division of  Securities to resolve the matter.  ITEM 4.
Submission of Matters to Vote of Security  Holders The Company has not conducted
any annual or special  meeting of  stockholders  at which any matters  have been
submitted for a vote of the stockholders at large during this transition period,
and no matter have been  approved  by the  written  consent of a majority of the
company's outstanding shares pursuant to Section 78.320(2) of the Nevada Revised
Statutes.

                                     PART II

ITEM 5.  Market for Common Equity and Related Stockholder Matters

The  securities  of ACT  International,  Inc.  are not traded on any exchange or
market  quotation  system.  The Company is currently  seeking listing on the OTC
Bulletin Board.  However, the National Association of Securities Dealers has not
approved any such listing or quotation.

Forward Stock Split

On June 15, 2000 the Company forward split the issued and outstanding  shares on
a 3 for 1 share ratio  increasing  the number of issued and  outstanding  shares
from 5,495,795 to 16,487,385.  All references to the number of common shares and
per common share  amounts have been restated to give  retroactive  effect to the
stock split.

Dividends

The Company has not paid cash dividends on its common stock and presently has no
intentions to do so. The Company  expects to retain any future  earnings to fund
operations for the foreseeable future.

Recent Issuance of Common Stock

On January  13,  1999 the Company  commenced  a private  offering of  securities
pursuant  to Rule  504 of  Regulation  D as  promulgated  by the  United  States
Securities  and Exchange  Commission.  Pursuant to such  offering  approximately
87,470 shares were sold to  approximately  33 investors in Utah and one investor
in California.  The sale of shares to investors in Utah pursuant to the offering
memorandum was in violation of Utah Rules and Regulations, and upon consultation
with the Utah Securities Division, management determined that the Company should
offer recission to investors who purchased under the private offering memorandum
of  January  20,  1999.  The  Company   completed  its  offer  to  rescind  such
transactions  in July 2000. No investor to whom such offer was made accepted the
Company's  offer to rescind.  The Company  requested  an  exemption  pursuant to
Section  61-1-14(2)(s) of the Utah Uniform  Securities Act to cover the offering
and sales made pursuant to the 504 Memorandum, however, the division declined to
grant such exemption.

<PAGE>

ITEM 6.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

The Company includes certain  estimates,  projections and other  forward-looking
statements  in its  reports,  presentations  to  analysts  and  others and other
material  disseminated  to the public.  There can be no  assurance  as to future
performance  and  actual  results  may  differ  materially  from  those  in  the
forward-looking  statements.  Factors that could cause actual  results to differ
materially from estimates or projections contained in forward-looking statements
include:  (i) the  effects of vigorous  competition  in the markets in which The
Company  operates;  (ii) the cost of entering  new markets  necessary to provide
products and  services;  (iii) the impact of any unusual  items  resulting  from
ongoing  evaluations  of the  Company's  business  strategies;  (iv)  unexpected
results  of  litigation  filed  against  the  Company:  and (v) such  risks  and
uncertainties as are detailed from time to time in the Company's public reports,
including this Report.

Plan of Operation

Management of ACT focused its activity  during the fiscal year ended October 31,
2000 on developing a dynamic  business plan to provide the  shareholders  of the
Company an improved  return on  investment,  and  establishing  a market for its
securities.  Management  also  determined  that  certain  acquisitions  of small
businesses  that would  benefit from the use of the  Company's  diamond  coating
technology,  should be pursued.  With a view  towards  improving  the  Company's
revenue potential, management determined it would be in the best interest of the
Company,  and its  shareholders,  to shift from its  dependence  on "royalty for
license" strategy as the sole source of Company  revenues,  to an operating plan
that would not only receive  revenues from license fees and royalties,  but also
from acquired or constructed  diamond coating centers owned and operated by ACT,
performing services in selected  application fields. As a result of Management's
decision to develop Company-owned diamond coating facilities,  ACT placed a cash
deposit  to  purchase  a  coating  chamber  that  will be  modified  to meet the
operating standards of the Company's Plasma Arc Deposition Patent. Management is
continuing  to refine  its  business  plan  incorporating  the  acquisition  and
construction of Company-owned facilities, while continuing to license its Plasma
Arc Diamond Coating Process to domestic and international companies.

In note 2 to its financial  statements as of October 31, 2000 its auditors state
that the  financial  statements  are  presented on a going  concern  basis which
contemplates  the  realization of assets and  satisfaction of liabilities in the
normal course of business.  However,  as noted there,  the Company has sustained
recurring  losses since inception and has negative working capital for the years
ended October 31, 2000 and the  approximate  nine month period ended October 31,
1999.  The Company  experienced  operating  losses of $1,081,605  and $1,354,438
respectively,  during those periods.  Its ability to continue as a going concern
is contingent upon its ability to secure additional  equity financing,  initiate
sales of its products and services,  and thereby attain  profitable  operations.
There can be no assurance that the Company will succeed in obtaining such equity
financing,  and  thereby  continue as a going  concern.  The Company is pursuing
financing  by the  issuance of common  stock  shares.  The Company also plans to
pursue  additional  financing  on  terms  beneficial  to  the  Company  and  its
stockholders.  Without such funds, however, the Company will be unable to comply
with its payment obligations to vendors, employees and consultants.

The Company  anticipates that the Company will require  $2,000,000 in additional
debt or equity financing in order to continue as a going concern during the next
twelve  months  of  operation.  The  Company  plans to  attempt  to  enter  into
arrangements  to raise these funds  through the private or public sale of common
shares, and by initiating profitable operations.  No assurance can be given that
either of these plans will be realized and thus,  no assurance can be given that
the  Company  will be able to  continue  as a going  concern in the  foreseeable
future.

Results of Operations

For the period from  inception  to October 31, 2000,  ACT had no  revenues.  The
Company had a cumulative  net loss of  $2,436,043  for the same period.  ACT had
general and administrative expenses of $2,436,043 which constituted the value of
common stock issued for cash, services related to commencement of operations and
stock option compensation expense.

For the twelve  month period ended  October 31, 2000,  ACT had no revenues.  The
Company had a net loss of $1,081,605 for the same period.  The Company's general
and  administrative  expenses  related to the  operations  for the twelve  month
period ended October 31, 2000 was $1,081,605.

<PAGE>

Liquidity and Capital Resources

During fiscal 2000, the Company  financed  ACT's  operations  primarily  through
funds  it  received  from  the  sale of  securities  in  private  placements  in
accordance  with  Regulation  D of the  Securities  Act of 1933  for  net  sales
proceeds of $888,160 (see the section "Recent Issuances of Common Stock" in Item
5 to this Report).

ACT has in the  past and is  currently  experiencing  negative  cash  flow  from
operations.  The funding of future  operations will require further infusions of
capital.  If additional  funds are raised by the Company through the issuance of
equity  securities,  securities  convertible  into  or  exercisable  for  equity
securities,  or an equity securities  exchange,  the percentage ownership of the
then current  stockholders of the Company will be reduced. The Company may issue
preferred  stock with rights,  preferences or privileges  senior to those of the
Common Stock.  Although  discussions are on-going with various potential sources
of  additional  capital,  There can be no  assurance  that the  Company  will be
successful in its efforts to obtain adequate  capital nor if any such additional
capital is made available to the Company that it will be on terms and conditions
that are not extremely dilutive to the present holders of the Common Stock.. ACT
is  currently  applying  for listing on the NASDAQ  Over the Counter  Electronic
Bulletin  Board.  The  failure  of  the  Company  to  establish  trading  of its
securities  may  adversely  impact  the  Company's   ability  to  obtain  future
financing.  Sector had no commitments  for material  capital  expenditures as of
October 31, 2000.

ACT's future revenues will be difficult to predict. Accordingly, any significant
shortfall of revenues in relation to  management's  expectations or any material
delay of  revenue  activities  would  have an  immediate  adverse  effect on its
business,  operating results and financial condition.  As a result of all of the
foregoing  factors,  management  believes that  period-to-period  comparisons of
ACT's results of operations  are not and will not  necessarily be meaningful and
should not be relied upon as any  indication  of future  performance.  Operating
Expenses.

Operating  expenses  consisted  primarily of rent and general and administrative
expenses.

Administrative Costs and Other Costs.  Management expects that ACT's general and
administrative costs, not taking into consideration any expansion of the current
network, to remain at current levels.

Management of Growth; Dependence on Key Personnel.

In the future,  ACT will be required  to continue to improve its  financial  and
management  controls,  reporting systems and procedures on a timely basis and to
expand, train and manage its employee work force. There can be no assurance that
ACT will be able to effectively  manage such growth.  Its failure to do so would
have a material adverse effect on its business,  operating results and financial
condition.  Competition for qualified technical and other qualified personnel is
intense  and  there  can be no  assurance  that  ACT  will be  able to  attract,
assimilate or retain additional highly qualified employees in the future. If ACT
is  unable  to  hire  and  retain  such  personnel,  particularly  those  in key
positions,  its business,  operating  results and financial  condition  would be
materially adversely affected.  ACT's future success also depends in significant
part upon the  continued  service of its key  technical  and  senior  management
personnel.  The loss of the services of one or more of these key employees could
have a material adverse effect on its business,  operating results and financial
condition.  Additions of new and departures of existing personnel,  particularly
in key  positions,  can be  disruptive  and can result in departures of existing
personnel,  which  could  have a  material  adverse  effect  on ACT's  business,
operating results and financial condition.

<PAGE>

Dependence on Proprietary Technology; Risks of Infringement.

ACT's  success  depends  upon its  proprietary  technology.  ACT will  rely on a
combination  of  Patent,  trademark  and  trade  secret  laws,   confidentiality
procedures and licensing  arrangements  to establish and protect its proprietary
rights. As part of its confidentiality procedures, ACT will generally enter into
non-disclosure   agreements  with  its  employees,   consultants  and  corporate
partners,   and  license  agreements  with  respect  to  its  patent  and  other
proprietary  information.  Despite these  precautions,  it may be possible for a
third party to copy or  otherwise  obtain and use ACT's  products or  technology
without authorization, or to develop similar technology independently.  Policing
unauthorized  use of ACT's  products is difficult and  expensive.  ACT will make
proprietary  data available for licensees,  but the provision of information may
increase  the  likelihood  of   misappropriation   or  other  misuses  of  ACT's
intellectual  property.  There can be no assurance that ACT's  protection of its
patent and  proprietary  technology  will be adequate or that ACT's  competitors
will not independently  develop similar technology,  duplicate ACT's products or
services,  or design  around  the ACT  patent,  or other  intellectual  property
rights.

ACT is not aware that any of its products  infringes the  proprietary  rights of
third parties.  There can be no assurance,  however, that third parties will not
claim such infringement by ACT with respect to current or future technology. Any
such claims, with or without merit, could result in costly litigation that could
absorb  significant  management time, which could have a material adverse effect
on ACT's business,  operating results and financial condition. Such claims might
require ACT to enter into royalty or license agreements. Such royalty or license
agreements,  if required,  may not be available on terms acceptable to ACT or at
all.  If such  agreements  are entered  into they could have a material  adverse
effect upon ACT's business, operating results and financial condition.

ITEM 7.  Financial Statements

The following  financial  statements are included in this part:  Audited balance
sheets of ACT International, Inc. (formerly American Coating Technologies, Inc.)
as of October 31, 2000 and the  approximate  nine months ended October 31, 1999,
and the related  statements of income,  retained earnings and cash flows for the
fiscal year ended October 31, 2000 and the approximate nine months ended October
31, 1999.

ITEM 8.  Changes In and Disagreements With Accounting and Financial Disclosure

The Company has used the services Tanner & Company, P.C. of Salt Lake City, Utah
as its independent auditor since inception on January 20, 1999. No disagreements
between  the  Company  and  Tanner & Co.  regarding  any  matter  of  accounting
principles or practice,  financial  statement  disclosure,  or auditing scope or
procedure occurred in connection with the audits of the years ending October 31,
1999 and October 31, 2000.

<PAGE>

                                    PART III

ITEM 9.  Directors,  Executive  Officers,   Promoters,   an   Control   Persons:
         Compliance With Section 16(a) of the Exchange Act



The following persons are the Directors and Executive Officers of ACT.

Name                        Age       Positions Held
----                        ---       --------------

Richard M. Sjostrom         51        President and Director (resigned 6-1-00)

Frederick J. Haydock        58        President and Director (6-1-00 to present)

David Mark Eames            31        Vice President and Director

David L. Taylor             29        Secretary/Treasurer

Alvin A. Snapper            67        Chairman of the Board

Under Article III, Section 3.2 of the Bylaws, Directors hold their offices until
their  successors have been elected and qualified  unless removed by a vote of a
two-thirds  majority of outstanding shares either at a stockholders'  meeting or
by written consent.

The business experience of the directors is as follows:

Mr.  Sjostrom was  president  and a director of ACT from  December  1999 to June
2000.  From 1987 to present,  Mr. Sjostrom has been a  member/manager  of N-Tek,
LLC.  During  this  time,  Mr.  Sjostrom   management,   analyzed  and  executed
improvements  in  technology  platform to  facilitate  the  conversion  of waste
materials  to  ethanol  and other  commercially  viable  products.  From 1987 to
present,  Mr.  Sjostrom has also been vice president of Intrade,  Ltd.  Intrade,
Ltd. sells various  products in countries  throughout the world but with primary
focus on the USA,  Japan and China.  Mr.  Sjostrom  earned a Bachelor of Science
degree from Utah State  University  in 1972 and a Juris  Doctor  degree from the
University of Utah, College of Law in 1995.

Dr.  Haydock has been the  President of ACT since June 2000  inception.  For the
past  five  years,   Dr.  Haydock  has  been  a  consultant  to  several  major,
international  industrial  gas  companies for high purity  chemical  analysis of
impurities in  semiconductor  grade bulk gases. He also has been building custom
mass  spectrometers for the semiconductor  industry and has provided  analytical
services for the start-up of ultra high purity air separation units. Three years
previous to becoming a consultant,  Dr. Haydock was the vice- president of Sales
and Marketing for a start-up analytical instrumentation manufacturer.  From 1970
to 1993 Mr.  Haydock  was a partner  in a  chemical  brokerage  company  and the
president of a crude oil  production  company and  manufacturer  of oilfield and
industrial  chemicals.  Mr.  Haydock has  thirty-five  years of  experience as a
chemist, analytical chemist, consultant and entrepreneur.


<PAGE>

Mr. Eames has been vice  president  and a director of ACT since  December  1999.
From 1996 to the present, Mr. Eames has been a manager in training at Enterprise
located in Salt Lake City. Mr. Eames attended Dixie College from  1987--1988 and
became a certified word processing specialist at Wasatch Career Institute.

Mr.  Snaper has been chairman of the board and director of research of ACT since
inception.  For the last forty years,  Mr. Snaper has been an  inventor/engineer
engaged in scientific  research and  development  of products and services.  Mr.
Snaper  holds over 600 patents and was  awarded  the Design News  Magazine  Best
Patent in four different years. Among his more famous inventions are the Look Up
Display for jet fighter aircraft, Tang and the IBM typewriter ball.

Mr. Taylor has been  secretary,  treasurer and director of ACT since  inception.
From 1991 to present, he worked at Taylor & Associates,  Salt Lake City, Utah, a
company  that sells and  manufactures  recreational  tents.  Mr.  Taylor holds a
Business Management diploma from Mountainwest College of Business & Technology.

Other that the foregoing,  no officer or director of ACT has been subject to any
of the following:

     a. Any  bankruptcy  petition  filed by or  against  any such  person or any
business of which such person was a general partner or executive  officer either
at the time of the bankruptcy or within two year prior to that time; or

     b.  Convicted  in a  criminal  proceeding  or  charged in or subject to any
criminal proceeding excluding traffic or other minor offenses; or

     c. Subject to any order,  judgment,  or decree, not subsequently  reversed,
suspended or vacated,  of any court of competent  jurisdiction,  permanently  or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities, or

     d. Being found by a court of competent  jurisdiction  (in a civil  action),
the  Securities  and  Exchange  Commission  or  the  Commodity  Futures  Trading
Commission to have violated a federal or state  securities or  commodities  law,
and the judgment has not been reversed, suspended or vacated.

Compliance  with Section  16(a) of the  Securities  Exchange Act of 1934

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
directors  and  executive  officers,  and  persons  who own more than 10% of the
Company's  Common Stock,  to file with the  Securities  and Exchange  Commission
initial  reports of  beneficial  ownership  and reports of changes in beneficial
ownership of Common Stock of the Company.  Officers,  directors and greater than
10%  shareholders  are required by the  Securities  and Exchange  Commission  to
furnish the Company with copies of all section  16(a)  reports they file. To the
Company's  knowledge,  based  solely on a review of the  copies of such  reports
furnished  to  the  Company,  none  of the  Section  16(a)  filing  requirements
applicable to its officers,  directors  and greater than 10%  beneficial  owners
were complied with for the year ended October 31, 2000.  Since October 31, 2000,
however,  all  such  reports  were  being  prepared  with the  exception  of one
shareholder, The Rothwell Trust, Mark Eames, Trustee, who despite being notified
of the reporting requirement of Section 16, has failed to file a Form 3.

Compensation of Directors

Directors who are not employees of the Company are reimbursed for  out-of-pocket
expenses incurred in their capacity as members of the Board of Directors.


<PAGE>

ITEM 10. Executive Compensation

During the period covered by this Transitional  Report officers and directors of
ACT were paid the following total consideration.

     David L. Taylor: $12,400 in cash.

     David Mark Eames: $1,400 in cash.

ITEM 11. Security Ownership of Certain Beneficial Owners and Management

The following  table sets forth as of October 31, 2000,  the name and the number
of shares of the Company's  Common Stock,  par value $0.0001 per share,  held of
record or  beneficially  by each person who held of record,  or was known by the
Company  to  own  beneficially,  more  than  5% of  the  16,899,960  issued  and
outstanding shares of the Company's Common Stock, and the name and shareholdings
of each director and of all officers and directors as a group.

                      (2)                               (3)
                   Name and                         Amount and
   (1)            Address of                         Nature of          (4)
Title of          Beneficial                        Beneficial       Percentage
  Class              Owner                           Ownership       of Class
--------       ---------------------------------    ----------       ----------
 Common        Alvin A Snaper                        8,250,000          48.81%
Rule 144       1000 W Bonanza Road                    Indirect
               Las Vegas,  NV 89106
               (Ned 'Dyne Research, Inc.)
--------       ---------------------------------    ----------       ----------
 Common        Taylor Family Limited Partnership     3,375,000          19.98%
Rule 144       5085 Sunset Lane                       Indirect
               Ogden, UT 84403
               (Access First International)
--------       ---------------------------------    ----------       ----------
 Common        Mark Eames                            3,375,000          19.98%
Rule 144       4824 S. Highland Cir  #202             Indirect
               Salt Lake City, UT 84117
               (The Rothwell Trust)
--------       ---------------------------------    ----------       ----------
 Common        Frederick J. Haydock                    300,000           1.77%
Rule 144       6340 S. Castlefield Lane                Direct
               Murray, UT 84107
--------       ---------------------------------    ----------       ----------
 Common        David L. Taylor                         315,000           1.86%
Rule 144       4707 Emma Mine                          Direct
               Herriman, UT 84065
--------       ---------------------------------    ----------       ----------

 Common        All Officers and                     15,615,000          92.4%
Rule 144       Directors as a                       Indirect
               Group                                and Direct
--------       ---------------------------------    ----------       ----------

<PAGE>

ITEM 12. Certain Relationships and Related Transactions

There have not, within the last year, been any transactions  with the registrant
in which any of its  officers,  directors or  controlling  stockholders  had any
interest, and no such transaction has been proposed.


                                     PART IV

ITEM 13. Exhibits and Reports on Form 8-K

(a)   Reports on Form 8-K.

1.    There was no Current Report on Form 8-K filed during the last fiscal year.

(b)   Exhibits


Exhibit
Number                Description
-------               -----------

<PAGE>

                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) to the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the  undersigned,  thereunto  duly  authorized  on this 12th day of February,
2001.



<PAGE>

                             ACT INTERNATIONAL, INC.
                             (A Development Stage Company)
                             Financial Statements
                             October 31, 2000


<PAGE>


                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                   Index to Financial Statements
--------------------------------------------------------------------------------


                                                                          Page
                                                                          ----

Independent Auditors' Report                                               F-2


Balance sheet                                                              F-3


Statement of operations                                                    F-4


Statement of stockholders' equity                                          F-5


Statement of cash flows                                                    F-6


Notes to financial statements                                              F-7






--------------------------------------------------------------------------------
                                                                             F-1

<PAGE>

                                                    INDEPENDENT AUDITORS' REPORT

To the Board of Directors
and Stockholders of
ACT International, Inc.


We have audited the  accompanying  balance sheet of ACT  International,  Inc. (a
development stage company), as of October 31, 2000 and the related statements of
operations,  stockholders'  equity and cash flows for the year ended October 31,
2000,  the period  January 20, 1999 (date of inception) to October 31, 1999, and
the period  January 20, 1999 (date of  inception)  to October  31,  2000.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of ACT International,  Inc., as of
October 31, 2000 and the  results of its  operations  and its cash flows for the
year ended October 31, 2000,  the period January 20, 1999 (date of inception) to
October 31, 1999, and the period January 20, 1999 (date of inception) to October
31, 2000, in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements,  the Company has a deficit in working capital,  incurred a
loss and has not generated  any revenues.  These  conditions  raise  substantial
doubt  about its  ability to continue  as a going  concern.  Management's  plans
regarding  those matters also are described in Note 2. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.



Salt Lake City, Utah
November 29, 2000

                                                                             F-2

<PAGE>

                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                                   Balance Sheet

                                                                October 31, 2000
--------------------------------------------------------------------------------



              Assets
              ------
Current assets:
     Cash                                                         $      10,860
     Prepaid expense                                                    539,583
     Deposit                                                             10,000
                                                                  -------------

                  Total current assets                                  560,443

Technology, net of accumulated amortization of $134,667                 370,333
                                                                  -------------

                  Total assets                                    $     930,776
                                                                  =============

--------------------------------------------------------------------------------


              Liabilities and Stockholders' Equity
              ------------------------------------

Current liabilities:
     Accounts payable                                             $       6,614
     Related party payable                                               36,000
                                                                  -------------

                  Total current liabilities                              42,614
                                                                  -------------

Commitments                                                                   -

Stockholders' equity:
     Preferred stock, $.001 par value; 5,000,000 shares
       authorized, no shares issued or outstanding                            -
     Common stock, $.001 par value; 100,000,000 shares
       authorized, 16,899,960 shares issued and outstanding              16,900
     Additional paid-in capital                                       3,307,305
     Accumulated deficit                                             (2,436,043)
                                                                  -------------

                  Total stockholders' equity                            888,162
                                                                  -------------

                  Total liabilities and stockholders' equity      $     930,776
                                                                  =============



--------------------------------------------------------------------------------
See accompanying notes to financial statements.                              F-3

<PAGE>
<TABLE>
<CAPTION>

                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                         Statement of Operations

                  Periods Ended October 31, 2000 and 1999 and Cumulative Amounts
--------------------------------------------------------------------------------



                                                          Period        Period
                                                        January 20,   January 20,
                                                        1999(Date of  1999(Date of
                                          Year Ended    Inception)to  Inception)to
                                          October 31,   October 31,   October 31,
                                              2000          1999          2000
                                          -----------   -----------   -----------
<S>                                       <C>           <C>           <C>
Revenue                                   $         -   $         -   $         -

General and administrative expenses         1,081,605     1,354,438     2,436,043
                                          -----------   -----------   -----------

              Loss before income taxes     (1,081,605)   (1,354,438)   (2,436,043)

Income tax benefit                                  -             -             -
                                          -----------   -----------   -----------

           Net loss                       $(1,081,605)  $(1,354,438   $(2,436,043)
                                          ===========   ===========   ===========

Loss per share - basic and diluted        $      (.07)  $      (.09)
                                          ===========   ===========   ===========

Weighted average common shares -
  basic and diluted                        16,267,000    15,676,000
                                          ===========   ===========   ===========

</TABLE>



--------------------------------------------------------------------------------
See accompanying notes to financial statements.                              F-4

<PAGE>
<TABLE>
<CAPTION>


                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                               Statement of Stockholders' Equity

                                         Periods Ended October 31, 2000 and 1999
--------------------------------------------------------------------------------








                                       Common Stock          Additional
                                -------------------------     Paid-In      Accumulated
                                   Shares        Amount       Capital        Deficit         Total
                                -----------   -----------   -----------    -----------    -----------
<S>                             <C>           <C>           <C>            <C>            <C>
Balance, January 20, 1999
(date of inception)                    --     $      --     $      --      $      --      $      --

Issuance of common stock for:
     Cash                           301,260           301       382,099           --          382,400
     Technology                  15,300,000        15,300       489,700           --          505,000
     Services                       260,850           261       159,544           --          159,805

Issuance of common stock
options                                --            --         763,000           --          763,000

Net loss                               --            --            --       (1,354,438)    (1,354,438)
                                -----------   -----------   -----------    -----------    -----------

Balance, October 31, 1999        15,862,110        15,862     1,794,343     (1,354,438)       455,767

Issuance of common stock for:
     Cash                           201,000           201       338,799           --          339,000
     Offering costs                 131,850           132          (132)          --             --
     Services                       705,000           705     1,174,295           --        1,175,000

Net loss                               --            --            --       (1,081,605)    (1,081,605)
                                -----------   -----------   -----------    -----------    -----------

Balance, October 31, 2000        16,899,960   $    16,900   $ 3,307,305    $(2,436,043)   $   888,162
                                ===========   ===========   ===========    ===========    ===========

</TABLE>



--------------------------------------------------------------------------------
See accompanying notes to financial statements.                              F-5

<PAGE>
<TABLE>
<CAPTION>

                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                         Statement of Cash Flows

                  Periods Ended October 31, 2000 and 1999 and Cumulative Amounts
--------------------------------------------------------------------------------


                                                                 Period         Period
                                                               January 20,    January 20,
                                                               1999(Date of   1999(Date of
                                                 Year Ended    Inception)to   Inception)to
                                                October 31,    October 31,    October 31,
                                                    2000           1999           2000
                                                -----------    -----------    -----------
<S>                                             <C>            <C>            <C>
Cash flows from operating activities:
     Net loss                                   $(1,081,605    $(1,354,438)   $(2,436,043)
     Adjustments to reconcile net loss to net
     cash used in operating activities:
         Amortization expense                        96,792         37,875        134,667
         Issuance of common stock for
           services                               1,175,000        159,805      1,334,805
         Stock option compensation expense             --          763,000        763,000
     Increase in prepaid expense                   (539,583)          --         (539,583)
     Increase in deposits                           (10,000)          --          (10,000)
     Increase in accounts payable                    30,134         12,480         42,614
                                                -----------    -----------    -----------

                  Net cash used in
                  operating activities             (329,262)      (381,278)      (710,540)
                                                -----------    -----------    -----------

Cash flows from investing activities:                  --             --             --
                                                -----------    -----------    -----------

Cash flows from financing activities:

     Issuance of common stock                       339,000        382,400        721,400
                                                -----------    -----------    -----------

Net increase in cash                                  9,738          1,122         10,860

Cash, beginning of period                             1,122           --             --
                                                -----------    -----------    -----------

Cash, end of period                             $    10,860    $     1,122    $    10,860
                                                ===========    ===========    ===========

</TABLE>


--------------------------------------------------------------------------------
See accompanying notes to financial statements.                              F-6

<PAGE>


                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements

                                                       October 31, 2000 and 1999
--------------------------------------------------------------------------------


1. Organization   Organization
   and            ACT International,  Inc, (the Company) was incorporated in the
   Summary of     State  of  Nevada  on  January  20,  1999 for the  purpose  of
   Significant    developing  business  opportunities  by licensing its patented
   Accounting     low-temperature    Plasma    ArcDeposition    technology    in
   Policies       semiconductor,   medical,   optical,   and   industrial   tool
                  applications   and  to  pursue  further  research  and  patent
                  processes.

                  In accordance with SFAS No. 7, the Company is considered to be
                  in  the   developmental   stage.   The   Company  is  devoting
                  substantially  all  of  its  efforts  to  establishing  a  new
                  business.  No  principal  operations  have  commenced  and  no
                  significant revenues have been derived from operations.

                  Concentration of Credit Risk
                  The Company maintains its cash in bank deposit accounts which,
                  at times, may exceed federally insured limits. The Company has
                  not experienced any losses in such accounts and believes it is
                  not  exposed to any  significant  credit risk on cash and cash
                  equivalents.

                  Cash and Cash Equivalents
                  For purposes of the statement of cash flows, cash includes all
                  cash and investments  with original  maturities to the Company
                  of three months or less.

                  Technology
                  The  technology  consists of costs to acquire all legal rights
                  to the  patents  of  the  technology  in  use by the  Company.
                  Technology is amortized over a five year period.

                  Income Taxes
                  Deferred  income taxes are provided in amounts  sufficient  to
                  give effect to temporary differences between financial and tax
                  reporting.

                  Loss Per Share
                  The computation of basic earnings per common share is based on
                  the weighted average number of shares  outstanding  during the
                  period.


--------------------------------------------------------------------------------
                                                                             F-7

<PAGE>

                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------

1. Organization   Loss Per Share - Continued
   and
   Summary of     The computation of diluted  earnings per common share is based
   Significant    on the weighted  average number of shares  outstanding  during
   Accounting     the period plus the common stock equivalents which would arise
   Policies       from the exercise of stock  options and  warrants  outstanding
   Continued      using the treasury  stock method and the average  market price
                  per share during the period.  Common stock equivalents are not
                  included in the diluted  earnings per share  calculation  when
                  their effect is antidilutive.

                  Use of Estimates in Financial Statements

                  The  preparation  of financial  statements in conformity  with
                  generally accepted  accounting  principles requires management
                  to make  estimates  and  assumptions  that affect the reported
                  amounts of assets and liabilities and disclosure of contingent
                  assets  and   liabilities   at  the  date  of  the   financial
                  statements. Actual results could differ from those estimates.

2. Going          The accompanying  financial statements have been prepared on a
   Concern        going-concern basis, which contemplates  profitable operations
                  and the  satisfaction  of  liabilities in the normal course of
                  business. As shown in the statement of operations, the Company
                  has had no revenues  from  operations  and reported a net loss
                  for the  periods  ended  October  31,  2000  and  1999.  These
                  uncertainties raise substantial doubt about the ability of the
                  Company to continue as a going concern.

                  The  Company's  continuation  as a going  concern is dependent
                  upon its ability to  satisfactorily  meet its debt obligations
                  through   securing   adequate  new   financing  or  generating
                  sufficient   cash  flows  from   operations.   The   financial
                  statements  do not include any  adjustments  that might result
                  from the outcome of these uncertainties.

                  Management  has entered into a plan where it is pursuing other
                  financing and searching for additional business opportunities.
                  It is not known if the Company will be successful.

--------------------------------------------------------------------------------
                                                                             F-8

<PAGE>

                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------

3. Prepaid        During the year ended  October 31,  2000 the  Company  entered
   Expenses       into an agreement with an entity for public relation services.
                  The Company issued 555,000 shares of common stock for services
                  to be  rendered  for a period of one year.  As of October  31,
                  2000 the Company  recognized  $385,417 as expense and $539,583
                  of prepaid expenses related to this agreement.


4. Stockholders'  The Company's  Board of Directors  authorized a  three-for-one
   Equity         split of its  common  stock,  effective  June 15,  2000.  As a
                  result  of  this  action  10,887,840  shares  were  issued  to
                  stockholders  of  record.  Par value of the stock  remains  at
                  $0.001 per share and  accordingly,  $10,888  were  transferred
                  from  additional   paid-in   capital  to  common  stock.   All
                  references to the number of common shares and per common share
                  amounts have been restated to give  retroactive  effect to the
                  stock split for the periods presented.


5. Income         The benefit for income taxes is different  from amounts  which
   Taxes          would be provided by applying the statutory federal income tax
                  rate to loss before benefit for income taxes for the following
                  reasons:




                                                                Period
                                                             January 20,
                                                            1999 (Date of
                                           Year Ended       Inception) to
                                          October 31,        October 31,
                                              2000               1999
                                        -------------       ------------
Federal income tax benefit
at statutory rate                       $     551,000       $    460,000
Change in valuation allowance                (551,000)          (460,000)
                                        -------------       ------------

                                        $           -       $          -
                                        =============       ============


--------------------------------------------------------------------------------
                                                                             F-9

<PAGE>


                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------

5. Income         Deferred tax assets (liabilities) consist of the following:
   Taxes
   Continued         Net operating loss carryforward             $    1,011,000
                     Valuation allowance                             (1,011,000)
                                                                 --------------

                                                                 $            -
                                                                 ==============

                  At October 31,  2000,  the Company  has a net  operating  loss
                  carryforward  available  to offset  future  taxable  income of
                  approximately $2,976,000,  which will begin to expire in 2019.
                  The  utilization  of the net operating  loss  carryforward  is
                  dependent  upon  the tax  laws in  effect  at the time the net
                  operating loss  carryforward  can be utilized.  The Tax Reform
                  Act of 1986 significantly limits the annual amount that can be
                  utilized  for this  carryforward  as a result  of a change  in
                  ownership.

6. Related Party  The  Company has a payable  due to an  officer/shareholder  at
   Transactions   October  31,  2000 in the amount of  $36,000.  The  payable is
                  unsecured, non-interest bearing, and has no specific repayment
                  terms.

                  The  Company  has  entered  into  consulting  agreements  with
                  certain   officers/shareholders.    The   agreements   require
                  aggregate  mandatory monthly  consulting fees of approximately
                  $18,000.   As  of  October  31,  1999  the  Company  had  paid
                  approximately $81,000 under the terms of these agreements. The
                  agreements  had  expired as of October 31, 1999 and no amounts
                  were due under these  agreements  at October 31, 1999.  During
                  the year ended  October 31, 2000 the Company  continued to pay
                  certain related  parties for consulting  services as they were
                  performed of approximately $190,000.

                  The  Company  has  entered  into  an  agreement  with  certain
                  shareholders  which  requires the Company to pay  royalties of
                  approximately  5% of gross revenues  generated from use of the
                  Company's technology. No amounts were due or paid for the year
                  ended  October 31,  2000 and the period from  January 20, 1999
                  (date of inception) to October 31, 1999.  This  agreement also
                  contains certain shareholder antidilution provisions until the
                  Company obtains approximately $2,000,000 in equity financing.


--------------------------------------------------------------------------------
                                                                            F-10


<PAGE>


                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------

6. Related Party  In December  1999,  the  Company  entered  into an  employment
   Transactions   agreement  with an employee  which expires  December 2003. The
   Continued      agreement  provides the  employee  with a monthly base salary,
                  business  expense  reimbursement,  and  eligibility  for: 1) a
                  performance  bonus;  2) stock  options  and 3)  other  benefit
                  programs offered by the Company. During the year ended October
                  31,  2000  the  Company  paid  approximately  $13,000  to  the
                  employee under the terms of the agreement.


7. Supplemental   During the year ended October 31, 2000:
   Cash Flow
   Disclosure          o  The  Company  did  not  pay any  amounts   related  to
                          interest and income taxes.

                  During the period ended October 31, 1999:

                       o  The  Company  did  not  pay any  amounts   related  to
                          interest and income taxes.

                       o  The Company issued  15,300,000 shares  of common stock
                          in exchange for technology valued at $505,000.


8. Preferred      The preferred  stock  consists of 5,000,000  shares with $.001
   Stock          par value. Upon any dissolution or liquidation, the holders of
                  preferred stock shall be entitled to receive out of the assets
                  of the  Company,  the sum  initially  paid per  share  and any
                  dividend  declared or unpaid  before any payment shall be made
                  or any assets  distributed  to the common stock  shareholders.
                  All other rights and privileges  are to be determined  upon an
                  issuance of the preferred stock.


9. Stock          During the period ended October 31, 1999, the Company  granted
   Options        stock options to certain  officers,  employees and consultants
                  of the Company to  purchase  445,000  shares of the  Company's
                  common stock.  At exercise  prices ranging from $.001 to $2.00
                  per share.




--------------------------------------------------------------------------------
                                                                            F-11

<PAGE>


                                                         ACT INTERNATIONAL, INC.
                                                   (A Development Stage Company)
                                                   Notes to Financial Statements
                                                                       Continued

--------------------------------------------------------------------------------

9. Stock          As of  October  31,  1999  all  options  had  been  exercised,
   Options        canceled or had expired.
   Continued
                  During the year ended October 31, 2000,  there were no options
                  granted.

                  Statement  of   Financial   Accounting   Standards   No.  123,
                  "Accounting  for  Stock-Based  Compensation"  (SFAS 123) gives
                  entities  the choice  between  adopting a fair value method or
                  continuing to use the intrinsic value method under  Accounting
                  Principles   Board  (APB)   Opinion   No.  25  with   footnote
                  disclosures  of the pro forma effects if the fair value method
                  had  been  adopted.  The  Company  has  opted  for the  latter
                  approach. At October 31, 2000 and 1999, there was no pro forma
                  effect on the  operations  of the Company as a result of stock
                  options.


10.Fair Value of  The  Company's  financial  instruments  consist  of  cash  and
   Financial      payables.   The   carrying   amount   of  cash  and   payables
   Instruments    approximates  fair value because of the  short-term  nature of
                  these items.


11.Recent         The Company  does not expect the  adoption of recently  issued
   Accounting     accounting  pronouncements to have a significant impact on its
   Pronounce-     results of operations, financial position or cash flows.
   ments


12.Commitments    Litigation
   and            The Company may become or is subject to investigations, claims
   Contingencies  or  lawsuits  ensuing  out of  the  conduct  of its  business,
                  including  those related to  environmental  safety and health,
                  product liability, commercial transactions etc. The Company is
                  currently not aware of any such items which it believes  could
                  have a material adverse effect on its financial position.




--------------------------------------------------------------------------------
                                                                            F-12